Square, headed by Twitter co-founder Jack Dorsey, makes a credit card reader that slots into smartphones and helps small merchants accept plastic more easily. The company has expanded into other areas of mobile payments, with mixed success.

The gift card service “wasn’t a very well thought-out experience,” said Rocky Agrawal, payment and commerce analyst at reDesign Mobile. Agrawal said he tested the gift cards at several merchants and at least half of the businesses did not know how to redeem them.

Square may also have had trouble dealing with different state laws covering gift cards. In California, if a consumer has a balance of less than $10 on a gift card, merchants are required to refund that value in cash, according to Agrawal.

“Merchants didn’t know anything about that when I asked them,” he said.

Square is a close strategic partner of Starbucks Corp , which has also invested in the start-up.

Agrawal said that when he tried to get refunds on Square gift cards at Starbucks shops in California, staff knew about the rules but had no way to give him cash for the value on the cards.